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Hammerson to submit planning application for a residential development in Dundrum

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The Dundrum Town Centre in Dublin is co-owned by Hammerson

The Dundrum Town Centre in Dublin is co-owned by Hammerson

The Dundrum Town Centre in Dublin is co-owned by Hammerson

Hammerson, the co-owner of the Dundrum Town Centre, is to submit a planning application for a residential development in Dundrum.

The UK group, which also owns 50pc of the Ilac Centre in Dublin, said 2018 had been "another strong year" for its Irish portfolio, with further rental growth and continued tenant demand.

The Irish portfolio generated net rental income of £40m (€46m) in 2018, and produced like-for-like net rental income growth of 1.6pc, according to results from the group.

All three of its Irish shopping centres - Dundrum, Ilac, and the Swords Pavillion - recorded higher income. Occupancy at its Irish centres remained very high at 99pc.

For principal leases, rents secured in Ireland were 28pc above previous passing rents and 8pc higher than December 2017 estimated rental values.

The group experienced strong demand from both leisure brands and restaurants in Dundrum Town Centre.

Overall though the listed company swung to a loss in 2018 after a year of retail failures put pressure on property values.

The group unveiled full-year results on Monday showing a loss before tax of £266.7m (€307m), compared with a profit of £413m (€475m) in 2017.

Net rental income declined 6.2pc to £347.5m.

Chief executive David Atkins said: "2018 was a tough year, particularly in the UK. Tenant failures, the structural shift in retail and a more considered consumer created a difficult operating environment, putting pressure on property values."

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Major retailers such as Maplin and House of Fraser went into administration last year, while many others used a form of insolvency known as a company voluntary arrangement (CVA) to shut stores.

Hammerson said net rental income had dropped by 1.3pc at its UK flagship destinations and by 4.3pc at retail parks due to tenant failures and CVAs.

The value of the company's portfolio dropped 5.9pc to £9.94bn.

Hammerson said its properties have fallen in value by an average of 4pc during 2018, including a reduction in UK values of 11pc.

The firm expects further weakness in the UK until the outcome of Brexit is determined.

The group also sold off £570m worth of its assets in 2018, with plans to dispose of a similar amount in the current year.

Hammerson said it would target another £500m worth of disposals in 2019 and has set up an Investment and Disposal Committee as it ramps up its focus on slimming down the portfolio.

The group is in talks over possible transactions with a total value of up to £900m.

The move was welcomed by activist investor Elliott, which upped its stake in the company to more than 5pc in July. The hedge fund has been pushing for a major reshaping of the portfolio.

Elliott said in a statement: "This increased focus on strategic disposals, as marked by updated targets for 2019 and a current pipeline of potential sales of over £900m, signals a positive development in the company's progress, and its ability to ensure that its portfolio of high-quality assets delivers compelling value for all shareholders."

(Additional reporting PA)


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